97 Tips for Canadian Real Estate Investors 2.0

Don R. Campbell, Peter Kinch, Barry McGuire, Russell Westcott

• Publisher: Wiley
• Year: 2011
• Print ISBN: 9780470963630
• eBook ISBN: 9780470964194
• Edition: 2
• Topic: Business
• Subtopic: Real Estate
• Index: Business

From the Bestselling Author of Real Estate Investing in Canada 2.0

What can you learn from four Canadian real estate experts who have 100-plus years of collective investing experience?

Whether you are a beginning investor or own a portfolio of residential properties, 97 Tips for Canadian Real Estate Investors, 2 nd Edition provides you with insights, strategies and success stories to build your wealth according to a proven system. Investors will learn about how to adapt to shifting market conditions, and financing and marketing strategies designed to improve cash flow and attract long-term tenants.

You'll discover the challenges and pitfalls that investors experience and how to avoid them. At your fingertips and success strategies based on the Authentic Canadian Real Estate System. From understanding the principles and economics of Investing, to sourcing properties and financing, closing deals and becoming a landlord, 97 Tips is chockfull of great ideas for investors who want to achieve beyond their dreams.

Praise from Canadian Investors for Real Estate Investing in Canada and the Acre System

"This material was absolutely essential for getting my investing jumpstarted. Thank you!" –Marianne Malo Chenard

"To compare this system to other real estate investing educators is like comparing day to night. I get all the information on a proven system I need. I don't have to pay thousands of extra dollars to get the 'Next level' of training." –Michael Colson

"If you are serious about taking control of your finances through real estate, this book is the perfect starting point." –Joe Iannuzzi

"Excellent advice on how to make profitable business decisions and how to know what the red flags are. –Kimberley Pashak

Special Bonus

Stay ahead of the real estate market. As a bonus, every registered reader of 97 Tips will receive a free CD covering the latest market changes. Register at www.realestateinvestingincanada.com.

PART 1

STOP THINKING . . . START KNOWING! THE FOUNDATION ON WHICH ALL IS BUILT

TIP #1: GO ON FACTS—NOT ON HYPE.

Forget guessing or hoping. Ask the tough questions of everyone involved—vendor, realtor and banker. If you are informed, you’re investing. If you are uninformed (or guessing), you are speculating.

Right up front in this book, we must be frank. We’ve all heard the stories about instant real estate riches, and there’s a certain thrill in thinking the deal-of-a-lifetime is just around the corner. But in order to be a long-term, wealth-creating investor (instead of a speculator), you need to be realistic. Real estate, like any investment vehicle, needs to have a system, a system that forces you to ask the tough questions . . . and removes any guesswork.

To be successful in real estate investing is to build long-term wealth. The quest for the “right” property, the thrill of the negotiation and the adrenaline rush of the offer are all kind of exciting. They also complicate the process, and firmly underline the need to develop an emotion-free approach to decision-making.

When experienced real estate investors talk about removing the emotion from their investment decisions, they’re not talking about conducting business from behind an emotional wall. They’re talking about making business decisions based on solid business information and what sophisticated investors call “market fundamentals.”

WHAT DO YOU NEED TO DO?

Commit to the facts

To make a decision based on fundamentals, always do your homework—all of it. Your homework will be complete once you can substitute the word “know” in the following sentences (where you may now be using the word “think”). For example:

“I know (not think) these renters will stay after the property changes hands.”

“I know (not think) the economics of the region and the neighbourhood are primed for long-term growth.”

“I know (not think) this property can be rezoned to accommodate my plans.”

“I know (not think) the income this investment generates will cover all of the expenses of the property.”

“I know (not think) that I am working with legitimate real estate investors and that any documents I sign are above board because I will not participate in a fraudulent deal.”

Adopt a proven investment system

You’ll learn more about what it means to “know, not think” as you move through this book. For now, it’s important to get a good handle on the idea that a real estate investment system means operating on fact-based decision-making.

To be successful, a system must do several things:

1. Be proven to work in your country, town and neighbourhood, thus not leading you down the wrong path.

2. Force you to ask the tough questions and not allow you to buy until all the homework is done (thus removing emotion).

3. Leave very little to chance, thus giving you a distinct advantage buying in any market that meets the criteria.

SOPHISTICATED INVESTOR TIP

Remember: “Fundamentals, not emotions!” Make this your business mantra. Never lose sight of the fact that when it comes to investing money, you need cold, hard facts, not just hopes and dreams.

KEY INSIGHT

In the beginning, investing with a system may proceed at a slower pace than you expect. However, with time and experience, you will learn to interpret critical information more quickly. A system-based approach means you’ll never miss a critical piece of information and never get caught in a bad deal. That makes the extra effort worthwhile!

TIP #2: FEAR: THE GREATEST MOTIVATOR AND THE GREATEST DE-MOTIVATOR. DEAL WITH IT.

Analysis paralysis is an investment killer. You get over it if you have a proven system you can trust.

Too much of the wrong kind of information can hold you back from making investment decisions. Even though you may feel like you are moving forward by collecting lots of information (some of which is useful and some of which is not), you will find that in the real world you will not make any money until you actually take the step and purchase a property.

We’ve all heard the “if only” stories from would-be investors. They’re the offspring of those who never took any action because fear held them back. As with all things in life, action fuels success.

Novice investors need to face the fact that, when it comes to the business of learning to be a successful investor, there comes a time when just listening will hold you back. Indeed, the ability to take action is the number one difference between successful real estate investors and wannabes.

WHAT DO YOU NEED TO DO?

Use fear as a tool—make it work in your favour

Fear is an instinct designed to keep us alive, not control us. Use it as a motivator by turning the fear of action into the fear of missing out and you’ll never have to tell those future grandkids about the time fear made you miss out on a real estate investment opportunity!

This step demands honesty. Ask yourself how often you’ve allowed fear to hold you back from making important decisions. Now ask yourself if that choice served you well financially. Recognize how the fear of stepping into real estate investment can keep us from earning long-term wealth.

Mind your W, S & Qs

Use the Write–Scratch–Question approach to fear management and you will find yourself answering your toughest questions.

Write: Don’t let yourself stew over a new excuse. Stop what you’re doing and write the excuse down on a piece of paper.

Scratch: Now cross it out with your pen.

Question: Turn that excuse into a “positive-spin question.” Even if X is true, what can I do about it? Get the answers you need to eliminate the fear.

Here’s what that looks like in action:

Write the excuse: “I heard that as a landlord you can get stuck with a bad tenant.”

Now, scratch out the excuse.

Formulate the positive-spin question: What system can I follow to ensure I provide great tenants with a great place to live?

Answer: Check credit and references. Set the standards by which you’ll accept a tenant, and set them high. Remember, you’re looking for an equity-building tenant—someone who wants to treat your property as if it were his own.

Use a lease agreement that gives you a proactive way to deal with any eventuality. (Include late penalties, non-sufficient-funds (NSF) cheques, move-out notices, pets, noise, etc.)

Know your local tenancy laws and do a move-in inspection (take your digital camera along) before the tenant moves in. Get postdated cheques where allowed.

Write the excuse: “I don’t have time to invest.”

Now, scratch out the excuse.

Formulate the positive-spin question: What can I do to prioritize my time to find a couple of hours a week to focus on my real estate investment business?

Answer: Talk to your spouse/family. Look at the demands of your family life; where is extra time available?

Seek out joint-venture partners to share the time and capital investment. Explore creative but less time-intensive investment opportunities using joint ventures or registered retirement savings funds. Surround yourself with like-minded people who understand long-term investing; they will gladly teach you their tricks.

Write the excuse: “I missed the market boom.”

Now, scratch out the excuse.

Formulate the positive-spin question: If real estate investment is about long-term wealth development, it must be about more than the “boom.” Where can I find a trusted system to help me see the advantages of the current market?

Answer: You’re in the real estate business to make money. Build a team of professionals that is designed to give you a market edge, not hold you back. Refer to the next tip for more on how to choose your team.

SOPHISTICATED INVESTOR TIP

Practise the win-win approach to team building. Don’t waste your team’s time and they’ll learn not to waste yours.

Never (ever!) build your team based on a discount price for services rendered.

Discount Team Members = Potential for Disaster!

KEY INSIGHT

Learn to channel healthy fear into positive investment decisions. If the answers to your due diligence questions aren’t leading you toward actual investment action, keep following the proven system until they do! Fear keeps you sharp—just don’t let it hold you back. If anyone gives you advice or an opinion, always look at the source to see if they really and truly know what they’re talking about. There are a lot of instant real estate “experts” popping up across the country; don’t let these fly-by-nighters steal your dreams or cost you your business and your reputation.

TIP #3:...

Table of contents

• Title Page
• Praise
• Copyright Page
• Introduction
• PART 1 - STOP THINKING . . . START KNOWING! THE FOUNDATION ON WHICH ALL IS BUILT
• PART 2 - MONEY MATTERS: MORTGAGE AND FINANCING TIPS
• PART 3 - HOW TO MAKE YOUR INVESTMENT SYSTEM WORK
• PART 4 - FOCUS ON THE TWO TYPES OF ECONOMIC FUNDAMENTALS AND DRAMATICALLY ...
• PART 5 - DATA, BRICKS AND MORTAR: THE PRACTICAL SIDE OF WEALTH CREATION ...
• PART 6 - NEGOTIATE THE DEAL YOU WANT (PRACTICE MAKES PERFECT)
• PART 7 - PURCHASING AND CLOSING: THE ART OF THE DEAL
• PART 8 - TENANCY ISSUES: MAKE DEFENCE YOUR BEST OFFENCE
• PART 9 - LEGAL INSIGHTS AND TAX TIPS: WHAT YOU’VE GOT TO KNOW (SO IT WON’T ...
• APPENDIX
• SUPPORT TOOLS AND KEY CONTACTS
• REAL ESTATE INVESTMENT NETWORK—REIN™
• ABOUT THE AUTHORS
• INDEX OF TIPS